Bank of Israel - Research Department

September 2015 was the beginning of a new large-scale terror wave in Israel, hitting
Jerusalem more than any other major city. Considering this terror wave as an
exogenous shock to the housing rental market in Jerusalem, this study analyzes its
effect on rental prices compared to Tel-Aviv and within Jerusalem. Immediately
after the beginning of the terror wave, rental prices in Jerusalem declined, compared
to Tel-Aviv, reaching a 2%-3% decrease within a year..

Estimated Natural Rate of Interest in an Open Economy: The Case of IsraelAuthor: David Elkayam, Guy SegalDiscussion Paper 2018.05, 07-2018

The new Keynesian framework as presented in Clarida et al. (2002) suggests that in an
open economy, the natural rate of interest consists of a local component (the expected
growth of domestic total factor productivity) and a global component (the expected
growth of world output). We estimate an augmented Taylor-type rule for Israel and
confirm that the above-mentioned components contain valuable information about the
monetary interest rate.